thoughts and insights about social and environmental responsibility and sustainability reporting

Friday, December 5, 2008

Quotes from the reporting conference

What they said at the Ethical Corporation Conference Reporting and communications Summit, London, November 25-26 , 2008

The Ethical Corporation Conference and Reporting Summit (25-26 November 2008, London) was attended by a competent gathering of sustainability professionals, consultants and yes, you've guessed it, me! It's always interesting when people get together to talk about reporting, because the conversation never quite knows whether to focus on the art of reporting or the art of managing and implementing social and environmental responsibility in the business, i.e., the content of the report. When people talk about reporting driving performance, and I heard that many times in the conference, are they talking about the delivery of a social report, or are they talking about the responsible ways in which the company performs in order to be able to report? It's a little confusing for the average bystander, I daresay. Though as a seasoned reporter, I maintain that there is truth to the assertion that reporting is a catalyst for action. The very nature of raising the question: "What have you done about reducing your GHG emissions?" creates an insight that some action is required in that area if the answer is an embarrassing silence.

When it all blows over, how will we be positioned ?The question was asked of Ernst Ligteringen, the CEO of the Global Reporting Initiative. Ernst maintains that it is more important now than ever before that businesses maintain their social and environmental responsibility efforts. Because when things get back to "normal", (someone will define normal, one day) the underlying issues such as climate change, use of resources, poverty and so on will continue to be high on the agenda. And those businesses who can responsibly deal with those issues will be best positioned.

We haven’t written the last chapter on Social ResponsibilityAnother quote from Ernst, in response to the question: "Is the GRI a standard or a tool?" Ernst says the GRI continues to evolve and represents work in progress. But to all of the rest of us, it looks like a standard, it feels like a standards, it is used like a standard, and it’s the nearest thing we have to a comprehensive social and environmental reporting standard. So what's the harm in considering it to be a standard? Well, we wouldn’t want to tread on the toes of ISO, who are busy developing their 26,000 standard which should see the light of day sometime this millennium. But that doesn’t promise to add much value over the GRI, in my view.

It's just noiseSpeaketh the irreverent Mallen Baker, who has a very specific and rather uncomplimentary view on reporting. In its current form, it's bad, he muses. He compares it to regurgitated messages which are force of habit but have long since lost their meaning and value, like "Stay clear of the doors" when boarding a train. He maintains that the reason and the delivery of the communication have become disconnected. What is the point of reporting, Mallen asketh. What does it tell us about the potential of companies to generate future cash flows? Reports require companies to generate their own context because without context, whatever they write is meaningless. I agree with this point. Mallen ends up saying that theGRI is a wish-list from a bunch of different stakeholders so that when they sit in a committee, so that they can decide what they would like to see. This does not, he says, add real value to the engine of driving change in the business. Ernst rebuts with the assertion that the GRI, when used properly, does provide context and is intended to provide balanced reporting. Some do it well, some less well. Slight advantage for Ernst in this argument, I feel. The GRI structure is, on the whole, positive and does assist in focusing the mind about what is important to consider when reporting.

Longer reports win awardsPronounceth once again our resident sceptic, Mallen Baker. I disagree. But let's get some data.

Comparability is a mythAha. A voice from the crowd. One of the core objectives of the GRI framework is to provide comparability – a way of benchmarking businesses against different indicators. Anyone who has tried to do this, and I have, quickly finds that there is very little that is directly comparable because, although the indicators are mostly specific, the answers are mostly selectively narrow or obtusely broad. For the time being, comparability is only marginally possible.

Marketeers are not interested. CSR teams need to build the bridgesI forgot to note who said this. So apologies for lack of credit. And yes, most marketing teams are conspicuously not involved in CSR efforts, and many are not even consulted in CSR reporting efforts. They may provide data for the report, but they are not a core member of reporting teams. This is an indication of the lack of integration of CSR strategy in business strategy which drives marketing strategy. Who can change this? Not the CSR teams. The leadership teams. Who more often than not contain marketers but not CSR people. Chicken and egg stuff, right?

We identified 130 material issues and we reported on 8Olaf Brugman, Senior Manager in the CSR Division at Rabobank, describes their approach to materiality. It takes a lot of self-restraint (or in some cases, reflief!) to select a small number of most material issues and report in depth only on those. But this is the thing to do. Well done to Rabobank.

Too much information in a non-structured way is non-informationUrsula Mather, VP environment and sustainabilty at Bayer. An impressive approach by Bayer to CSR and to reporting, with focus on material issues. A key watch-out when reporting is to ensure you don’t engage in telling everything you have in the interests of transparency. You have to tell what's material.

Every word was assuredHilary Parsons, head of Corporate Affairs , describes the 15 month long assurance process of Bureau Veritas for the Nestle "Creating Shared Value" Report. Every sentence was anlysed to ensure there is proof. Hilary believes Nestle gained true credibility value from this rigorous assurance process.

If you could ask Coca Cola any question, what would it be ?Jo Franses of Coca Cola UK talked about the innovative "Let's get together " approach to interactive stakeholder engagement and the new platform for delivering open and honest conversation about the brand. Since May 2008, 4,000 questions were posted, 900 unique answers were supplied and over 100,000 have visited the site. Sounds suspiciously like good practice to me.

Mouse-over glossaryStiaan Wandrag of Sasol cited this as an innovative approach to on-line reporting. And, it might not sound much, but it's actually quite a good thing. Every time they use an acronym a little window pops up with the full monty. I just checked it out. It works. I mean, who carries in their head GTL, CTL, UNFCCC, CCS, BEE, GEC, OHSAS… I could go on. I mean, do they talk like that at SASOL ? But, good for us people who get frustrated having to look things up every five minutes.

Our culture is performance driven, values ledThis may not sound original but it is a neat and punchy way to describe the Cadbury philosophy which incorporates some wonderfully refreshing work on CSR and reporting, led by the impressive Allison Ward. ( I am not repeat NOT saying this because Cadbury handed out thick slabs of dairy chocolate at the conference). The Cadbury report is focused, clear , interesting and geared to different level of stakeholder competence and interest. dearcadbury.com is well worth a visit – it's quite an inspired approach to reporting. Allison says: Even the glossiest of websites is not relevant without content. So from Eco Eggs to considering the possibility of making biofuels from chocolate waste (I think that was a joke!), I make a vow of eternal loyalty to Cadbury. Guess I will just have to eat more chocolate … that’s going to be really tough….

You can tell about how serious a company is about CSR depending on who has accountability for the CSR function in the businessI attribute this to Charlotte Grezo, former head of sustainability at Lehman. This is a good point. Someone has to manage sustainability just as someone has to manage everything else that is important in the business. Those companies who just let CSR stroll in and out of the different functions in the business without direct accountability cannot truly hope to leverage csr opportunities in an optimal way. Investors are not interested in straightforward philanthropy. Charlotte said this too. Investors want to see some meaningful use of community investment that creates new value. Not just giving charity. I think most businesses understand this these days, no?

Integrated reporting helps drive internal alignmentAnother impressive lady of Cr, Susan Blesener of Novo Nordisk, described the Novo Nordisk approach to integrated reporting in an clear and enlightening way. I haven’t been a fan of integrated reporting but I was impressed by the Novo Nordisk presentation and could see the value of ensuring comprehensive alignment of all business and sustainability messages in one mindset and one report.

The truth is … everything is connectedJo Confino of the Guardian profoundly confirms that if the business is not understanding the complexity of all its connections, it is going to go nowhere. He advocates looking at the true purpose of reporting and not just get into the routine of reporting and lose the unique value it can bring. Makes sense, I guess.

Reporting is giving way to communication – these are not the same things.Mark Weintraub. Shell. Bingo. Well, whoever said they were the same things. Reporting is just one part of a comprehensive communications strategy. Whoever thinks they can produce a report and then shut up has obviously not got it. I am comforted that Shell has.Mark says that there is a search for simpler, clear and cheaper ways for reporting. And here I will agree. There comes a point where reporting becomes over complex and defeats its objective. Back to Cadbury?

Lawyers in the other company allowed them to do it alreadyMark Weintraub again, on the question of to what extent they scrutinize other companies in the same sector as part of their report preparation. If other companies have reported, and their lawyers have allowed them to do it !, then it appears that Shell management would also be convinced to make similar disclosures. I suspect the competitiveness in reporting drives many companies to look for reassurance and also the opportunity for a competitive edge amongst peers. This is a good thing.

There was a trickle-down effectAndrea Smith on the Carbon Disclosure Project on Supply Chain Reporting. Great Project. Questions to suppliers trickled down to their suppliers and so on. The driving of responsibility through the supply chain – a great example of making things happen differently. The change driven by the CDP ( mouse- over please, Sasol) is quite impressive.

Now ICT is the sound byte of the monthPenny Shepherd of UKSIF on the apparently sudden emergence of a host of sustainability issues in the ICT sector. She's right. It's there. Don’t let peer pressure pass you by, if you are an ICT company, better get on the train.

Reporting is like a Russian dollAndrew Wilson, MD of that great company, Corporate Citizenship. He is referring to a Babushka doll. You know, you keep opening it up and there's another doll inside, smaller. And another and another …. Andrew was expressing his view that reporting has to be global AND local, and that she shape and form should be the same but the content should be made relevant at local level by a country or regional focus or an issues focus relative to local priorities. I wish more globals would get this. A global report may be right for analysts but it misses most of the local stakeholders. Fortunately, there are many companies reporting today at both levels.

200 indicators per countrySofia Fernandez described how Telefonica manages global reporting and local reporting. Whilst there is scope for each local operation to report in its own way, each is required to contribute to the global picture and the local CFO's are the ones charged with making sure that each local subsidiary delivers data on a number of agreed global indices. Good approach. Babushka.

This was a good conference.Guess who said that ? Got it. Me again. I enjoyed the conference. On the whole. It did provide an opportunity to hear good practice from around the world, and talk to those responsible for it. I would have welcomed a little more focus on some of the reporting skills and innovations, but broadly, there were lots of opportunity for insight and the quotes about are merely a small selection of the various issues that arose.

6 comments:

Hi ElaineThanks for the write-up - even if my words of wisdom failed to persuade you!Re. the point on longer reports, do bear in mind it is the opposite of the point I was making to argue that they should win awards - I was just referring to some recent research that suggested they did. My point is that the criteria of the awards are wrong unless they focus on what really drives value for the audiences of the reports.In any case, you can find more references to that research here:http://www.mallenbaker.net/blog/post.php?id=106Best wishes- Mallen

hi mallen ... thanks for your response and for the clarification... i checked out the research and note that "Longer reports are positively correlated with winning an environmental or CR award: Statistical analysis shows that for every extra page in a CR report the likelihood of a company winning an international environmental award goes up by 3% (although the research does not suggest the link is causal)." http://www.spada.co.uk/news/

So i have learned something new, thanks!!

I guess Vodafones 378 pages makes them a dead cert!

And apologies if i was a little harsh. I do think that, when used well, GRI is good (but not perfect). And i fully agree that reporting should not be an end in itself but a reflection of relevant progress, in context.

Hi Elaine, It was nice to meet you at the conference and I've also enjoyed reading your write-up. Looking at my notes, though, I think Penny Shepherd was talking about the need for CSR people to hot foot it over to their pensions departments and get them wised-up on sustainability. I don't think ICT came into it - or did I miss that bit? (She did mention ESG...) We need audio pop-ups for all those acronyms.Jennifer Waller, Sustainability Communications, Amsterdam.